Thursday, December 1, 2011

Host Liquor Liability (Repost)

Over the next several months there will be many reasons for businesses and individuals to host events and parties where alcohol may be served. Businesses will have parties and happy hours to celebrate the holiday season where they will be providing alcohol for employees or customers. Individuals may use the same reason to have friends and family over to celebrate and consume alcohol. Taking my party hat off for just a moment and putting my risk management/insurance hat on, let me discuss something called Host Liquor Liability.

This is a coverage that often is part of a Commercial General Liability (CGL) policy and also included in homeowner policies as long as the individual and/or businesses are not in the occupation of making, selling or distributing of alcohol for money (meaning bars, distilleries, wineries, restaurants, etc. would have a different coverage simply called Liquor Liability). Host Liquor Liability is a coverage to help protect in cases where injuries happen because of alcohol incidents. One common example would be a participant is driving drunk and as a result crashes and injures people in an auto accident. Wherever the drunk driver last consumed alcohol could find themselves facing a lawsuit for injuries that were caused by the driver. They could be pulled into the situation because it was at their event and under their supervision that this driver consumed alcohol and then got behind the wheel intoxicated and drove off.

So here is one key thing about host liquor liability that all your employees, customers and/or friends and family will like to hear: if you are going to have an event with alcohol you are best to give it away. If at your event money changes hands and people are then able to consume alcohol you would have violated the no making, selling or distributing of alcohol for money rule. If you are having alcohol at a charity event the alcohol would have to be donated for the event or have a very good paper trail showing that none of the moneys collected to get in the event went toward the purchase of alcohol. Now, if your event is going to have a cash bar you will need to look into purchasing two items. The first is a temporary liquor license from the state and the second is a Liquor Liability insurance policy. Both of those can be costly and time consuming to acquire so your best bet is to just give it away… and be more popular with your employees, customers, friends and family.